Impact of crisis on purchasing power of different population groups

Recently we have heard completely opposite conclusions regarding the personal income stratification and which population groups have been hardest hit by the crisis. Some persons say that the burden of cutting wages and salaries and lay-offs was borne by the lower-income population, sparing the rich. Others are of the opinion that the high wages and salaries saw a proportionally more substantial reduction and the purchasing power of pensioners improved by almost 30%. Moreover, those who had earned a lot in the real estate business became insolvent after the bubble burst, incurring huge debt and abandoning the millionaire lists. Which of the above arguments are true? Let's see how the crisis has affected different population groups – the richer and the poorer, the employed, pensioners, the unemployed, large families etc., and in which direction the community and the government should seek solutions.

Gini coefficient 

First, I will give a brief overview of the dynamics of the Gini coefficient [1], the most often used measure reflecting income inequality, and will provide my assessment of the factors affecting it. The first substantial fall in inequality was observed in 2006. It was the year of the Saeima (Parliament) election, and the social transfers (child birth and child care benefits, local government benefits) were raised and support to farmers strengthened, reducing income inequality. However, the moment of improvement was short, and income stratification grew during the boom (2007-2008). In the above period the real estate bubble triggered a rapid rise in wages and salaries and property income, while other income, incl. pensions and benefits, increased at a lower rate. The second improvement was observed during the crisis when Gini coefficient shrank from 37.4% in 2008 to 36.1% in 2009, moving a further 0.9 percentage point down in 2010 (see Chart 1). The dynamics of these last few years was mostly driven by a change in the pensioners' income relative to the developments of wages and salaries – the article will provide a detailed analysis of the above. Overall, the EU direct payments to farmers should be mentioned as an income-levelling factor during the above period, facilitating the closure of income gap between the rural territories and cities.

Equalization of personal income in recent years notwithstanding, the level of polarisation of material well-being in Latvia still remains among the highest in the European Union – it is a negative fact if we look at it from the point of view of a sustainable socio-economic situation. In order to understand Latvia's "weak points" and assess the potential future dynamics, a deeper analysis of income distribution and the impact of prices on purchasing power for different population groups is necessary.

Chart 1. Gini coefficient in Latvia (%) Chart 2. Real consumption expenditure average per household member per month by quintile (at constant 2010 prices, in lats)

Gini coefficient in Latvia (%)

Real consumption expenditure average per household member per month by quintile

Source: CSB and Eurostat data Source: CSB data and Bank of Latvia calculations

In the pre-crisis period the consumption of the top-income households or the fifth quintile (20% of the population with the highest income) demonstrated the most prominent increase, followed by the most pronounced fall during the crisis. I deliberately refrain from saying "the most rapid" increase or fall as the percentage growth/decrease for all quintiles was similar. When looking at Chart 2, it visually seems that the consumption of the population group with the lowest income or Quintile 1 only slightly moved in line with the changes in the economic cycle; however, it is not quite so. At its peak, the real consumption of the lowest income group was 41% larger than in 2005, contracting considerably during the crisis but still exceeding the level of 2005 by 14%. The consumption of the top-income population group at its highest point exceeded the level observed in 2005 by 34%, after the downslide shrinking slightly below the level of 2005.

Real expenditure, 2005 = 100%







Quintile 5 (20% of the population with the highest income)







Quintile 1 (20% of the population with the lowest income)







Differences in the consumption dynamics of the richest and poorest population groups suggest that in 2007–2008 not only the stratification of income increased (also demonstrated by the Gini coefficient), but the procyclical household behaviour was also more typical for higher-income households. Inspired by the surging income and projecting the same growth dynamics also in the future, the more well-off households borrowed additional funds for real estate purchase or consumption: purchase of cars, furniture, household appliances and building materials. Despite the declining income, precautionary savings were made more actively and debt deleveraging took place during the crisis, thus posting a larger consumption decline than the income fall would require. At the same time, majority of households had a very low level of savings; since there were limited possibilities of saving during the crisis, the previous period's minor savings were also spent. According to the survey on the welfare of households conducted by the CSB, approximately 4/5 of the households admit that they do not possess savings that would sustain the household for at least 1 month; moreover, this indicator has grown worse in 2011.

Household income by socio-economic status

The amount of a person's spending mostly depends on his/her well-being; hence, the household income analysis by socio-economic status is an important framework for assessing the inequality factors, describing the population groups by the main source of income: wage labour employees, pensioners, self-employed persons, etc. According to the above criterion, 56.1% of all households were working for a wage in 2010, and their share shrank by 9.4 percentage points over 2008. The second largest group was pensioner households (29.5%); their percentage share grew by 5.0 percentage points. It should be taken into account that such changes result both from acquiring the pensioner status and a change in the main source of income from the wage to the pension for the current pensioners. With a surge in unemployment, the share of the households whose major source of income was benefits, grants, support from relatives, friends or family members, etc. grew from 2.6% to 7.1%. During the pre-crisis – crisis period the share of self-employed households remained broadly unchanged (approximately 7.4%).

Number of employees and average wages and salaries

Compensation to employees accounts for 60-80% of the household disposable income (it was closer to 80% in 2007-2008; currently it is about 65%). During the crisis the disposable income had dropped almost to the level of 2005 both as a result of a decrease in the average wages and salaries and in the number of employees.

  • In the years of accelerated growth the real average gross wage surged by 52% in comparison with January 2005, while in the period of the economic slowdown it shrank by 13%, sliding back to the level of December 2006. In nominal terms the wage posted an even more rapid fall of 19% due to deflation (Obviously, the impact of the grey economy cannot be excluded either, with the so-called "envelope wages" contributing a more notable wage adjustment.)
  • At the same time the number of employees shrank to 732 thousand in February 2010, down from 974 thousand in the middle of 2008. Gradual employment recovery followed later as the number of employees increased by 70 thousand. The upward trend in employment is a positive development; however, the increase in the number of the long-term unemployed gives rise to concern, i.e. those who seek job for less than a year, mostly find it, while the long-term unemployed fail to find a job (or do not look for it). This factor may also trigger the income stratification. Similarly, the high youth unemployment rate should be mentioned as a negative fact: in the third quarter of 2011 the average rate of jobseekers in the economy was 14.4%, while it was 28.2% in the age group below 24 years, which is almost twice higher. The national policy should be improved in order to solve such structural issues as these aspects are closely related to education, national programmes for involving young people in the job market, training of the unemployed and sectoral development, i.e. matching of the skills and the labour market demand regarding professions and qualifications.

Old-age pensions is the second largest primary source of personal income. Different exaggerations regarding pensions circulate in the public media due to a lack of objective assessment of the situation; therefore I will provide an in-depth analysis of this issue, discussing the changes in both the number of working and non-working pensioners and the amount of pensions.

Number of pensioners and average pension

First let's discuss the issue of economically active pensioners. In June 2009 the Saeima and the government passed a decision on reducing pensions for non-working and working pensioners by 10% and 70% respectively, causing prominent changes in the labour market. As a result of the crisis, public administration reforms and the considerable reduction of pensions, approximately 40 thousand pensioners terminated their employment relationships: 95 thousand employees reached the age entitling them to a state old-age pension in 2008, and in 2010 the number of working pensioners shrank to 53 thousand. Obviously, loss of additional income also reduced the purchasing power of these pensioners. The situation further evolved in three directions:

  • As pensioners left their jobs, they were replaced by younger employees. The short-term increase in employment in the age group of up to 24 years in June-August is more related to the summer work and practice of schoolchildren and students. However, the increase in the number of employees in the age group of up to 59 years in October–November (approximately 10-15 thousand) could be referred to the job replacement which is not a seasonal change (see Chart 3).
  • Part of pensioners lost/left their job as a result of the job cuts in the public administration. This could also be considered a relative job replacement allowing a part of the working-age population to keep their jobs.
  • We can assume that a part of pensioners continued to work, receiving the so-called "envelope wages" or officially registering a relative as an employee but actually performing the job themselves. In such a case, the purchasing power of the pensioners remained unchanged although it was not revealed in the official data.
Chart 3. Change in number of employees by age group in comparison with January 2008 (in thousands) Chart 4. Number of old age pensions granted in the respective year (in thousands)

Change in number of employees by age group in comparison with January 2008

Number of old age pensions granted in the respective year

Source: CSB data and Bank of Latvia calculations Source: SSIA data

When the Constitutional court passed a ruling cancelling the above law in December 2009, pensioner employment gradually started to recover.

In 2009–2011 the number of persons having acquired the status of a pensioner was particularly high, largely on account of an increase in the number of persons having been granted early retirement pensions. Chart 4 illustrates the dynamics of the newly granted pensions; it should be taken into account, however, that the recipients of the early retirement pensions might be accounted for twice in this statistics as their status changes from the recipient of the early retirement pension to the regular old-age pension. Let me remind you that in Latvia the age of retirement is 62 years, with possibilities of early retirement at the age of 60. Early retirement was triggered by loss of jobs and financial reasons: lower wage, reduction of the capital indices used in calculating pensions as of 2010, as well as the planned liquidation of the additional payments and early retirement opportunities could decrease the pension in the future or extend the necessity to work or seek job. Due to similar reasons specialists of several professions, inter alia top officials, decided to use their right to service pensions. The age of retirement for those entitled to service pensions is from 38 to 55 years depending on their profession. In other European countries retirement ages are higher on average; however, the average life span is longer there as well. An often-quoted comment regarding pensions in the budget planning discussions was that since 2008 the average real pension had grown by almost one third. Despite the fact that this estimate is mathematically accurate, it might create a wrong understanding of the changes in pensioner income. A considerable increase in the number of persons having acquired the status of a pensioner (see Chart 4) and the average amount of the newly granted pensions (see Chart 5) resulted in a rise of the average pension. However, this fact in no way improved the purchasing power of those pensioners who received an unchanged amount of pension since the beginning of 2009, while for those approximately 40 thousand working pensioners, who left or lost their jobs, one of their sources of income was also lost. Hence the well-being of the above mentioned pensioners deteriorated considerably. Moreover, this fact might also be overlooked in the analysis of households by socio-economic status as the change in the status by main source of income leaves a stronger impact on the number of households in the respective group in the reporting period but does not show exactly how many households have moved from a group of higher income to that of lower income after the change in their status.

Chart 5. Average monthly old age pension (in current prices, in lats per month) Chart 6. Real average old age pension and gross wage (2005=100%)

Average monthly old age pension

Real average old age pension and gross wage

Source: SSIA data Source: CSB and SSIA data, Bank of Latvia calculations

The last pension indexation took place in October 2008 and the last significant additional payment for the length of service stayed in force in January 2009. Consequently, for assessing the purchasing power of the average pension it would be more appropriate to use the average amount of pension registered in January 2009 and to estimate the price impact on it. The month-on-month price reductions in April–December 2009 had a favourable effect on the purchasing power of pensioners; during 2010 it gradually deteriorated, but after an accelerated price rise in 2011 all the positive contribution of the purchasing power improvement was lost. At this stage, the purchasing power of a pensioner who has had no additional income has deteriorated by 3.1% since January 2009.

Comparison of the average wage and pension, their proportion and changes

In comparison with the fall in the average wage, the average pension has really been affected less negatively, even looking beyond the effect of the above newly granted pensions. Nevertheless, it should be taken into account that the average wage and average pension amounts were not the same at the beginning of 2005 (it was selected as the point of reference for the assessment of the dynamics). For the assessment of income levels and the number of the employed and persons receiving different pensions and benefits, see Charts 7 and 8.

Chart 7. Real average old age pension, gross wage and other types of income (in lats per month, average wages for 2011, seasonally adjusted data) Chart 8. Number of employees, recipients of different pensions and benefits (in thousands)

Real average old age pension, gross wage and other types of income

Number of employees, recipients of different pensions and benefits

Source: CSB and SSIA data, Bank of Latvia calculations


Comparing the average wage and pension, we can conclude that their relation provides a good illustration of changes in the overall income inequality indicators in Latvia (see Charts 9 and 10). In 2005 – 2006 the average wage was three times higher than pension, while in 2007 – 2008 this ratio moved up to 3.7 times. Following the pension indexation in April 2008, it shrank to 3.5 times, in October it stood at 3.0, edging further down to 2.7 after granting the additional payments for the length of service in January 2009. After the above date the wage-pension ratio was adjusted more on account of the decrease in the average wage and the impact of the newly granted pensions on the average pension, thus further bridging the gap between wages and pensions. As last two years have seen a slow rise in the average real wage, the income convergence trend has gradually started to reverse.

Chart 9. Average wage-pension ratio; S80/S20 (top-bottom) income quintile ratios of wages and pensions Chart 10. S80/S20 (top-bottom) income quintile ratio by age group

Average wage-pension ratio; S80/S20 (top-bottom) income quintile ratios of wages and pensions

S80/S20 (top-bottom) income quintile ratio by age group

Source: CSB data and calculations, SSIA data and Bank of Latvia calculations Source: CSB data

Diverse income levels are observed within the socio-economic groups themselves: households representing sole proprietors, those working for a wage, and pensioners. Each group may have its own Gini coefficient: the ratio of the average pensions of more well-off pensioners and the recipients of the lowest pensions; differences between the highest and lowest wages. The possibility that the pension or wage might not be the sole source of income should also be taken into account. Calculations show (see Chart 9) that it was not only the gap between the average wage and pension that widened in 2011, but also the ratios between the highest and lowest wages and pensions changed.

  • The average level of 20% of the highest pensions (Quintile 5) exceeded that of 20% of the lowest pensions (Quintile 1) approximately twice, and this ratio has been growing since the beginning of 2009: a pronounced trend of an increase in pension inequality has been observed. The detailed data show that the "middle class" of pensioners gradually decreases, while the number of pensioners receiving very small pensions (below 100 lats) and those having relatively high pensions grows. For example, at the beginning of 2009 the number of recipients of pensions above 1000 lats slightly exceeded 200, whereas at the end of 2011 there were almost 900 of them.
  • Wage inequality is considerably higher than that of pensions; however, during the crisis up to the middle of 2011 wages posted a moderating inequality trend as the amount of top wages fell rapidly. It should be noted that the 12-month average indicator had to be used for the chart illustrating the top and bottom quintiles of wages as the December bonuses resulted in pronounced peaks and troughs. The wage data explicitly show that bonuses were mostly paid to the top-wage recipients; as regards those with lower wages, bonuses were either not granted at all or, in the private sector, more often than not were paid in the envelope.

When comparing the levels of pensions and wages, it should always be kept in mind though that their relative difference is really prominent. In the 20% top pensions group the average pension fluctuates around 300 lats, and a mere 0.2% of pensioners have a four-digit pension, whereas the average wage of the 20% of top-wage earners exceeds 1000 lats. On account of the shadow economy, the real difference could be even more pronounced. According to Charts 9 and 10, the differences between the total disposable income in the age group of over 65 years are considerably larger than indicated by the ratio of the highest and lowest pensions. That might point to a strong impact of additional income (wages, self-made produce, support of local governments and relatives, etc.) on the purchasing power of pensioners.

Generally the gradual increase in the average wage-pension ratio in 2011, with the additional impact of the stratification of pensions and in the last half of the year also that of wages, makes us conclude that the polarisation of income will probably increase and Gini coefficient will deteriorate in 2011–2012.

At-risk-of-poverty rate

At-risk-of-poverty rate (i.e. the share of population whose income is below the 60% threshold of the disposable income median [2]) is an income inequality measure showing which population groups are more liable to financial difficulties. This rate is calculated in various detailed breakdowns by age, gender, economic activity, type of household, before and after social transfers have been received, etc. Like Gini coefficient, at-risk-of-poverty rate also deteriorated in the years of accelerated growth, improving again during the crisis. It should be kept in mind though that the median itself as the mean value also changes and the situation of the poorer population may see relative improvement not only as a result of an increase in income but also a decrease in the number of higher income earners. At-risk-of-poverty rate of the groups of pensioners or the unemployed may also improve on account of a drop in employee income, also reducing the poverty risk threshold. The effects of these factors are shown in Chart 11. For easier comparison with at-risk-of-poverty rates of Chart 12, the values in the chart are reported in reverse, emphasizing a lower possibility to slide into the poverty risk area instead of higher income.

Chart 11. Poverty risk threshold*, average old age pension, gross wage and unemployment benefit (in lats per month, at constant 2011 prices) Chart 12. At-risk-of-poverty rate by most frequent activity status (%)

Poverty risk threshold*, average old age pension, gross wage and unemployment benefit

At-risk-of-poverty rate by most frequent activity status

* Poverty risk threshold for a single-person household is provided.

Source: CSB and SSIA data, Bank of Latvia calculations
Source: CSB data

The unemployed are most at risk of poverty. However, it may differ in each case depending on whether the unemployed is paid the unemployment benefit, whether he/she participates in the 100 lats support programme, receives local government assistance or earns income otherwise.

In 2007–2008 pensioners were subject to poverty risk almost to the same extent as the unemployed (see Chart 12). In 2009 the situation changed considerably. As seen in Chart 11, the average pension for the first time moved above the poverty risk threshold in 2009. It was on account of both an increase in the average pension and decrease in the poverty risk threshold as a result of lower employee income. Nevertheless, the situation is not homogeneous for pensioners either: working pensioners are less subject to poverty risk whereas single pensioners without additional income are at the highest risk. It should be noted that it is the situation of the elderly population that has seen the most radical changes. During the growth years almost 85% of single pensioners were considered to be very poor, but in 2010 their share contracted to 9% (see Chart 13).

Chart 13. At-risk-of-poverty rate by household type (%) Chart 14. Consumption expenditure average per household member per month by number of children in the family (at constant 2010 prices, in lats)

At-risk-of-poverty rate by household type

Consumption expenditure average per household member per month by number of children in the family

Source: CSB data Source: CSB data and Bank of Latvia calculations

Sustainable economic development and positive birth-rate dynamics are impossible without a well-considered family policy. Obviously it is an issue requiring a complex solution, including job prospects for parents and also for their children in the future. And this is Latvia's Achilles heel. Almost one in five households with children has faced poverty risk. Incomplete families and large families are at a particularly high poverty risk: approximately 37% of families in the group "two adults and at least three children" and 38% of families "one adult and at least one child" should be considered poor (see Chart 13). Certainly, the situation differs in the cases where the wage received supports one or several persons, even if it is possible to pass on some consumer goods (clothes, books, toys; see Chart 14). Hence progressivity in the child social benefits, receiving a higher benefit for each subsequent child, is quite reasonable. The question remains, however, whether it is sufficient at this stage? The answer seems to be negative. Along with the benefits and local government support to cover child subsistence expenses, more complex solutions are also possible, e.g. contributions to the third pillar of pension funds for each child, or additional payments to pensions resulting from the social insurance contributions made by children.

Since at-risk-of-poverty rate in Latvia ranks among the highest in Europe, the cross-border comparative indicators, broken down by type of family and socio-economic group, are quite disappointing. Nevertheless, Eurostat data quite clearly show the policy differences between countries. Although the poverty risk in incomplete families is high in almost all countries, that of large families demonstrates great differences. In this respect situation in the Scandinavian countries is the best – large families are financially better off than families in the respective country on average. Improvement in income stratification does not provide sufficient grounds for optimism as overall personal income has decreased, inter alia for the poorest part of the population as well. Material deprivation rate reflecting the share of households that find it difficult to pay their public utility services bills and loan payments and to buy durable goods has deteriorated notably, increasing from 21.9% in 2009 to 27.4% in 2010, and still further up to 30.9% in 2011. We have to admit though that in 2005 it was considerably higher, e.g. 38.9%. Changes in the population purchasing power depend not only on the nominal income but also on price changes; hence this is also a significant aspect in shaping the economic policy.

Price impact on the purchasing power of various population groups

The consumption baskets of various socio-economic groups of population differ, hence each group may have its own consumer price index: in a family of pensioners food products, healthcare and maintenance of the dwelling account for majority of expenses (see Chart 15); consequently, changes in food prices, medical services and medicine as well as public utilities costs would have a more pronounced effect on the purchasing power of these families, while changes in prices of clothing, transportation, public catering and hotels would have a considerably smaller impact on pensioners.

Chart 15. Consumption expenditure average per household member per month by socio-economic group in 2010 (at current prices; % of total)

Consumption expenditure average per household member per month by socio-economic group in 2010

Source: CSB data and Bank of Latvia calculations


Overall consumer price changes in Latvia, published by the CSB, almost coincide with those of pensioner consumer prices (see Chart 16). Being aware of the fact that the consumption basket of this group considerably differs from the average expenditure structure of the population, such results seem surprising, particularly so at the very peak of the price surge, i.e. in 2008. However, a detailed analysis suggests that it is a coincidence. The index calculated for all households differs from the consumer price index published by the CSB on account of the weights. The data obtained in household surveys are adjusted for those positions where the surveys traditionally report smaller amounts (alcohol, tobacco, durable goods) or where more accurate information on expenditure is available from the large companies, public utilities service providers, retailers, etc. In 2008 the impact of prices on the purchasing power of pensioners was more pronounced as a result of the accelerated growth of maintenance costs of the dwelling (29%) and food prices (18%). However, the most dramatic price surge was reported for tobacco products (76%) as a result of a rise in excise tax. The upswing in the tobacco prices affected other households and the average indicator to a greater extent as the demand for this product in the group of pensioners is not high. Among the elderly generation, the number of smokers is twice smaller than the average in this country; moreover, the habit of smoking is more characteristic of men, whereas the number of women is twice higher than the number of men in the age group of over 65.

Chart 16. Consumer price changes for socio-economic groups (%)

Consumer price changes for socio-economic groups (%)

Source: CSB data and Bank of Latvia calculations


The overall conclusion of the price impact analysis: the consumer price index (CPI) published by the CSB has so far provided good representation of the impact of prices on the purchasing power of pensioners up to 2009. Since it is a coincidence, however, we cannot always rely on it and the capability of indexation to offset this impact should be checked. A higher impact of prices on pensioners was seen already in 2011 as a result of accelerated growth of maintenance costs of the dwelling and food prices. Currently the difference is minor though.

Similarly, changes in the purchasing power of the most well-off and poorest households should be analysed. As in the case of pensioners, the share of food prices and dwelling maintenance costs is also larger for the lowest-income households, but less is spent on health care. Please note that it only refers to the ratio of expenses against total expenditure; as regards the most well-off households, they spend twice as much on food in terms of the amount of consumption (see Chart 17). Due to a larger share of spending on food, the price rise in 2011 affected the poorer households to a greater extent: inflation stood at 4.4% in Latvia, reaching 5.1% for the poorer households. For the top-income households, however, inflation was 3.9%, lower than PCI. The result of the above calculations, however, is no absolute truth as they do not comprise the above weight adjustment for the traditionally incompletely captured expenditure groups: alcohol, tobacco, durable goods, etc.

Chart 17. Top and bottom-income group nominal consumer expenditure average per household member per month (at current prices, in lats)

Top and bottom-income group nominal consumer expenditure average per household member per month

Source: CSB data and Bank of Latvia calculations



Generally it can be concluded that the trends of total income and material well-being are mostly shaped by the employees and pensioners due to their large proportion; however, the unemployed, incomplete and large families are poorer and more exposed to poverty risk. Just some years ago pensioners were also included in the list of the relatively poorest population. However, the situation has changed considerably. Still at the outset of the crisis pensions were raised notably, therefore the purchasing power of pensioners deteriorated to a lesser extent in comparison with other households. However, the calculations suggest that income stratification might increase again; moreover, in 2011 the purchasing power of pensioners and lower income households was more markedly affected by the rise in food prices and maintenance costs of the dwelling. In view of the already high polarisation of material well-being and its prospective increase in the future, a more progressive tax policy will become increasingly topical. It is at the discretion of politicians and the government which tax rates, discounts, benefits or other means are used to implement the progressivity, but solutions have to be sought anyway.

In the coming years the issue of the social policy sustainability will also remain in the highlight. The figures are discouraging: approximately 760 thousand payers of social insurance contributions [3], 580 thousand pension recipients (old-age, disability, service pensions, and pensions in case of loss of supporter), 30 thousand unemployment benefit recipients as well as those receiving sickness, maternity, parent, child care benefits, etc. Indexation of pensions was temporarily suspended as a result of substantial budget expenditure growth. The Treasury data suggest that the central government special budget expenditure grew from 0.9 billion lats in 2007 to 1.5 billion lats in 2010, which along with declining revenues accounted for a 350 million lats excess of expenditure over income. As a result of slightly higher revenue and considerably lower expenditure, the special budget financial balance improved in 2011, though still retaining a deficit of 145 million lats. We should not disregard the aging of population and increase in life expectancy observed throughout Europe that make governments extend the retirement age. Latvia cannot escape this situation either, therefore it has been planned to gradually raise the retirement age to 65 years. Solutions on service pension and other issues are also sought.

In general, the improvement in the purchasing power of pensioners in comparison with other households during the crisis should rather be considered a recovery from a chronic disease as the poverty risk rate of this group was inadmissibly high in the previous years. But now the time has come to devote all our strength (both literally and figuratively) to family policy; otherwise after a couple of decades we all will have to face poverty.

[1] Characterises income inequality. Gini coefficient is 0 if everybody has equal income. The closer it approaches 100, the higher the income inequality.

[2] Median is the middle result in a row of numbers where all elements have been arranged in an ascending order.

[3] Database information available only in Latvian.

APA: Rutkovska, A. (2022, 26. may.). Impact of crisis on purchasing power of different population groups. Taken from https://www.macroeconomics.lv/node/1818
MLA: Rutkovska, Agnese. "Impact of crisis on purchasing power of different population groups" www.macroeconomics.lv. Tīmeklis. 26.05.2022. <https://www.macroeconomics.lv/node/1818>.

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